How does credit card debt consolidation help you?
Credit card debt consolidation can help you in the following ways:
- Lower interest rates and make monthly payments affordable
- You have to make a single payment every month
How will you know that credit card consolidation is suitable for you?
Check out these factors before you opt for this credit card debt eliminate option:
- Interest rates - If the interest rate is not substantially reduced, then there is no point in paying additional fees for consolidating your credit card dues.
- Repayment term - You should not reduce your monthly payment amount in exchange for a longer repayment period.
- Regular income - A steady flow of income is essential to make the agreed upon monthly payments to the consolidation company.
Apart from above, you can follow some more tips on credit card consolidation to solve your debt problems completely.
How does credit card consolidation help you repay debts?
With the help of credit consolidation, you can restructure your debt repayment plan. Through this, you can consolidate your multiple credit card bills into a single payment every month. Thus, you need to manage only one payment instead of handling several creditors.
However, the amount you need to pay every month will depend on the following:
- Current interest rates on your debts
- Your total outstanding balance
- The amount of your monthly income
- Your creditors
Is there only one way to consolidate credit card bills?
No. There are 3 ways to consolidate your multiple credit card bills. They are:
- 01 Credit card consolidation program
- 02 Do it yourself credit consolidation
- 03 Credit card debt consolidation loan
Find out how you can choose the most suitable option for you.
How does credit card debt consolidation affect your credit report?
Usually, there is a positive effect on your credit report when you opt for this debt relief strategy since you pay back your debts in full.
What are the differences between credit card consolidation and settlement?
Credit card debt settlement is also a suitable option to get rid of debts. However, there are some differences between consolidation and settlement, which are given below.
|Credit card consolidation||Credit card settlement|
|1. Reduction in principal amount|
|2. Reduction in interest rate|
|3. Lump sum payment|
|4. Single monthly payment|
|5. Free counseling|
|6. Trust account is created|
|7. Effect on the credit report - "Paid in Full"*|
|8. Effect on the credit report - "Paid as Agreed"**|
* Paid in Full - It means that the debtor has paid the outstanding balance in that account in full.
** Paid as Agreed - It means that the debtor has paid the amount requested to satisfy the account.